St. Paul daily globe. [volume] (Saint Paul, Minn.) 1884-1896, 1887-09-10
Stockholders of the North
western Car Company Be-
gin New Litigation,
In Which They Ask For a Com
plete Accounting Of the
Company Funds.
Judge MeCluer Will Order
the Sale Of the Car Com
ne < pany Plant.
The Price Fixed at 100000
IAN Uninterested Ref
.0v cree to be Chosen.

Another siege of litigation is prom
lSed for the. Northwestern Manufacture
ing and Car company's difficulty. The
matter has been placed in chancery
and a bill was filed In the United
States circuit court yesterday by
Henry a. Porter and Ransom r.
Gable, of Illinois, against Senator d. NJ.
Sabin, formerly president, and Joseph
Z. OGorman, formerly auditor and
treasurer of the company. Porter holds
$3.50, 900 worth of preferred and common
stock, and Cable $S7, 500 worth. A his
tory in detail is given of the incorpora-
ton and transactions OF the company,
and OF the connection of Senator Sabin
with 1t, and the transactions between
the car company and Seymour, Sabin &
Co. The orators pray for hearing, that
the respondents be required to give
full accounting of all matters connected
with the car company, and that the as
sets OF the car company be distributed
among creditors and stockholders.
MesSrs. Porter and Cable state that they
think the company In the hands Of 8
receiver will not be able TO pay so cents
on the dollar, but, Il distribution d.
rect is Endorsed by the court, the assets
may be sufficient 10 cover all liabilities,
dollar for dollar. They charge Sabin
and O'GOrman with gross business mis-
conduct and abuse Of the contide1.cs
placed in them by the stockholders.
The bill intimateS that Sabin's acts
HAVE BEEn CROOKED,
and that O'Gorman has acted In collu-
sion with him. After the recital Of the
facts pertaining 70 the sale of the stock
of Seymour, Sabln &C.,, and the subse-
quent acts Of Trustee Sabin, the bill
hiiegeS that the assets purchased of Sey-
nfour. Sabin q Co., amounting to
about s1.500,0oo, supposed to be the
basis for the common stock issued in
payment, had little value or none at all;
that many of the items given as assets
were in reality liabilities; that several
accounts represented as assets had no
more than nominal value, being alb
sOrbed i'll other accounts; that the as
sets of Seymour, Sabin & Co. were In
the liabilities of Seymour, Sabin b Co,
were given as about 81, 0S0, Zoo, while In
reality they were more than g. OO0, 600,
and might have been Is, COX, 900, and that
the stockholders, Immediately upon re-
celying the stock Of the car company in
payment for the sale, absorbed among
themselves s1,5o0,000 preferred stock
and S750,0O0 common stock, leaving as
stock and $4,000 common, with which
to pay debts. The Car company had,
about the time Of Its organization, as
sets amounting to $1,000, GOO, and very
little indebtedness. The petitioners
also claim that 5000, 600 worth Of the as
sets of Seymour, Sabin & Co., We're
NEVER TURNED OVER
to the car company, and that at the
meeting of the car eonpany's directors
III June, 1882, a resolution was passed
authorizing the assumption of $3.50
worth of the preferred stock of Sey-
mour, SabIn d company On condition
ton to the extent of $25O, 600,
and sthe contract was accordingly
made, but the s250,00O continued
to be held by Seymour, Sabin q Co.
The pickle Seymour, Sabln & Go. got
into by the absorption of the s2,25O, Goo
preferred and common stocks by their
stockholders compelled the company to
negotiate fo< sl,61B. 1854, and the
credit, money and paper Of the car com
pany, Messrs. Porter & Cable aver,
were used without authority by
the firm Of Seymour, Sabin Il Co., at
different times, so that during the two
years business career Of the Car com
pany the amount of credit, money and
paper appropriated by Sabin and O'Gor-
man to help out Seymour. Sabin & Co.,
reached in the aggregate to the enor-
NOUS figure Of S12,0O0,0G0. They also
allege that these little transactions were
without the knowledge Of the stock
holders of the Car company, being
CONCEALED, AND NO RECORD
being kept. On the car company's
books was an account against Seymour,
Sabin L Co., out Of all this misappro-
priation, amounting to only 81, $50, 1903,
and even this item has been reduced
until it is only 81 ,042, 59S.71, which claim
the petitioners regard as utterly
worthless. Eleven days before the
failure there was on the car
company's books credit to
Seymour, Sabin & Co., of
about $4,000; the day after there was
a debt of nearly $4S5,o00, and ten days
after the indebtedness of the firm to the
company had reached over S1;50e,O0
The petitioners charge Sabin with
ordering 0'GoTman to make false en-
try upon the books of profit amounting
to 1902, 101 .99, when the real gain was
only $50, 900. Yet on that showing a
dividend was ordered, which could
only be paid out of the
capital stock. But the gravity of the
charge made against Sabin Is that he,
without authority, in the hour of the
car company's peril Endorsed Seymour,
Sabin s. Co. IS paper. so that the loss to
the car company on this alone Is at least
1905 900, and In the language of the
orators, ''the loss of this capital can be
charged to the official misconduct
Of MeSsrS. Sabin and O'G0rman,
attributable to the misconduct of the
defendants herein, and to their fraudu-
lent use of the corporate name, and
credit, and the misrepresentation OF the
corporate funds and assets to the benefit
of other corporations, and chiefly to the
benefit of Seymour, Sabin q Coz Sa-
bin is also charged with
{: THROWING AWAY THE CREDIT
of the car company on j. A. TownEhend
u Co., of which D. Nj. Sabin and George
M. Brush were the company" and
which firm is now inselvent; also the
now worthless paper of the Union De
pot Street Railway and Transfer com
pany, which is now In the hands of
referee. Porter and Cable further allege
that the Chicago Railway and Equip
ment company was created for the
purpose of purchasing cars manufact-
ured by the; car company, but that it
was nothing more than a device of
Sabin to raise money for Seymour,
Sabin & Co., and that Sabin was the
largest stakeholder in the creature cor
poration. Porter and Cable refer to the
denialby the district court at Saltwater
of che petition of Receiver Brown, set
ting forth requests Of stockholders
for permission to commence an
action against Sabin and O'Gorman,
and they say that inasmuch as there
seems to be no redress in court law,
they have been compelled to apply to a
court of equity for relief, and they pray
chat the Judges sitting in chancery will
compel sabin and o'Gorman to account mt
for everything, that the Indebtedness
aud the responsibility for the condition
% tho